African banks are generating higher profits than businesses in North America, Europe, Asia, and the Middle East, as the continent's financial systems become more deeply integrated into economic activities. This trend is strengthening Africa's position in global finance and creating a larger pool of capital for lending, payments, business expansion, and financial inclusion.
According to the latest McKinsey review of the African banking sector, African banks achieved a return on equity (ROE) of 19% in 2024, the highest among all major banking regions in the world. Latin America followed with 16.3%, while the Middle East achieved 13.6%. Europe had a ROE of 10.9%, North America had 10.3%, Asia (excluding China) had 9.3%, and China had 8.7%. The figures show that the African banking sector is becoming one of the most efficient segments of the global financial industry.
In South Africa, Standard Bank reported a 11% increase in core earnings in 2025, driven by growth in fee income, trading activities, and a decrease in credit losses. Capitec, one of the country's fastest-growing lenders, recorded a 23% increase in annual earnings, driven by an increase in interest income.
In East Africa, the Kenyan KCB Group reported a 15% increase in pre-tax profits in the first quarter of 2026, while Equity Group saw a 52% increase in pre-tax profits for the entire year of 2025, reflecting steady growth in lending, transaction volumes, and digital financial services. These results indicate that the banking sector remains strong in many markets, despite uneven economic conditions and ongoing currency volatility in some countries. At the continental level, this trend is becoming increasingly evident.
According to McKinsey, African banks' revenues will exceed $100 billion for the first time in 2025, reaching approximately $107 billion. These figures indicate that banking is increasingly becoming one of the sectors driving economic expansion by mobilizing capital, supporting payments, and providing financial services to a growing customer base. The growth trend in the continent's banking sector is primarily evident in its largest economies.
In Kenya, banks are increasingly using transaction data generated by mobile payment platforms to support lending and customer acquisition. The country's six largest banks reported higher-than-average returns on equity in 2024. Nigeria's banking sector remains profitable despite significant currency reforms and macroeconomic volatility, while Morocco continues to improve the efficiency and quality of digital services in its highly concentrated banking market.
In addition to the largest economies, countries such as Tanzania and Cote d'Ivoire are experiencing some of the highest growth rates in the banking sector on the continent, indicating that financial deepening is expanding beyond traditional banking centers. This expansion is also changing the role of banks in the African economy.
According to McKinsey, Africa has become one of the few major regions where financial sector revenues increased as a share of GDP between 2020 and 2024. The continent recorded a growth of 0.4%, while North America, China, and the Middle East experienced declines. These data suggest that banking activities are becoming increasingly integrated into the continent's economic landscape.
At the same time, banks are becoming less dependent on traditional lending. Commission revenues from payments, cards, insurance, and transaction services grew faster than interest revenues between 2020 and 2024. Payments, in particular, have become one of the fastest-growing business areas as digital finance expands in African markets.
Recent developments show that governments, regulators, and development institutions are trying to capitalize on this momentum. In early June 2026, the African Development Bank announced a $125 million investment in ATIDI (African Trade and Investment Development Insurance) to help unlock institutional capital held by African pension funds, insurers, and sovereign wealth funds. In several markets, regulators are increasing capital requirements and encouraging consolidation to create larger and more resilient banking institutions that can finance economic growth.
However, the report also highlights a challenge that could determine whether current performance can be maintained. While African banks are leading the world in terms of profitability growth, they remain less efficient than many global counterparts. The continent's «cost-to-assets» ratio was 2.6% in 2024, double the global average of 1.3%. This ratio has remained relatively unchanged since 2020, despite four years of strong revenue growth. This means that a significant portion of the recent surge in profitability was driven by favorable conditions, including high interest rates and currency revaluation, rather than a significant increase in operational efficiency.
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